Naira Loses Key Support After Nigeria’s Forex Reserve Revelations
- Foreign exchange reserves much lower than previously disclosed
- Naira is set to drop further after gap disclosed, bankers say
A vendor displays Nigerian Naira banknotes.
Photographer: Michele Spatari/AFP/Getty ImagesThis article is for subscribers only.
Nigeria’s naira has lost an essential source of support after the central bank’s long-delayed financial statements revealed that effective foreign-exchange reserves at its disposal were much lower than previously disclosed.
The accounts published last week showed a previously undisclosed $7.5 billion in transactions with JP Morgan Chase & Co. and Goldman Sachs Group Inc. In addition, it detailed an exposure in foreign-currency forward contracts of almost $7 billion. The central bank also showed it vastly exceeded the limit placed on its lending to the government.